Fit for the Governance of Global Value Chains?—The Framework for Commercial Dispute Resolution in Finland from a Multiparty, Multi-Contract Perspective

Jaakko Salminen

【Abstract】 Global value chains, made up of multiple actors from diverse backgrounds and connected through several contracts, pose major problems for coordinated governance. One practical prerequisite is a dispute resolution forum that can take into account all the actors and contracts that are relevant from the perspective of a specific dispute. In this paper, I will discuss the legal framework for organizing commercial dispute resolution in Finland through arbitration and mediation. In particular, I will evaluate the framework from the perspective of multiparty and multi-contract situations typically in complex contractually organized value chains such as the ongoing Olkiluoto 3 nuclear power plant construction project. In this context, the relationship between the rule of law and the fragmented regulatory field of commercial dispute resolution seems ambiguous.

1. Introduction

Global value chains are made up of multiple actors from diverse backgrounds and connected through several contracts. They pose major problems for coordinated governance especially if disputes arise between actors that are not parties to the same contract. One practical prerequisite for value chain governance is a dispute resolution forum that can take into account all the actors and contracts that are relevant from the perspective of a specific dispute. In this article, I will discuss the legal framework for organizing commercial multiparty and multi-contract dispute resolution in Finland with special reference to problems possibly faced by contractually organized value chains.

In Section 2, I will first use the Olkiluoto 3 nuclear power plant project as an example scenario where multiple parties and contracts have a vested interest in a dispute. Instead of its planned completion in 2009, the Olkiluoto 3 project has been delayed seven years and has given cause to multibillion-euroarbitration claims. I will follow this by laying out the general framework for multiparty and multi-contract international commercial dispute resolution.

In Section 3, I will examine Finnish regulatory approaches to multiparty and multi-contract dispute resolution from the perspective of global value chain governance. I will discuss Finnish cases on the scope of arbitration agreements, some multiparty and multi-contract aspects of the 2013 Arbitration Rules of the Finland Chamber of Commerce, and Finnish regulation on the enforceability of mediated agreements.

Finally in Section 4, I will discuss conclusions that can be drawn on the basis of the presented framework. States have shown little interest in regulating dispute resolution in global value chains even when these have a major impact on diverse actors nationally and internationally. Instead, parties' contractual arrangements and dispute resolution institutes, such as the ICC in Paris, the FCC in Finland, and CIETAC in China, have a major regulatory function that may leave open questions of transparency, legitimacy, and efficiency.

2. Governing Disputes in Value Chains

Value chains are typically organized in groups of contracts working towards a shared economic objective.It is unclear what the precise legal effects of a value chain are on the individual constituent contracts as this depends on many factors, such as the contents of the contracts and any practices that the value chain members may have established between themselves.Intuitively, however, the fate of the contracts making up a value chain reston the other contracts of the same value chain. The parties to one contract have a vested interest in the other contracts. A key problem in value chain governance is, thus, that the chain may cease to operate as a whole and instead fragment into actors who concentrate on individual contracts without oversight of the whole.One approach to remedy fragmentation-related problems is to establish methods of information sharing that transcend contract boundaries, thereby creating contract boundary spanning governance mechanisms.

In Section 2.1, I will use the Olkiluoto 3 nuclear power plant project as an illustrative example of the problems of a contractually organized value chain from the perspective of implementing a value chain spanning governance mechanism. Then, in Section 2.2 I will chart the framework for organizing a centralized dispute resolution forum as one important aspect of value chain governance.

2.1 Olkiluoto 3

Construction on Finland's fifth nuclear power plant, Olkiluoto 3, was supposed to becompleted in 2009. At the time of writing, Olkiluoto 3 is expected to be ready at earliest in 2016. Simultaneously, the main parties are engaged in a multibillion-euro arbitration.While there is little public knowledge about the dispute and the issues at stake, a study of the Olkiluoto 3 value chain published by the Finnish Nuclear and Radiation Safety Authority（FNRSA）in 2011 highlights some of the problems encountered during the project.Unless otherwise stated, all information in this article on the Olkiluoto 3 project is based on that report.

Olkiluoto 3 is set apart from most value chains by the involvement in the project of a regulatory authority, the FNRSA. FNRSA's involvement has a fundamental impact on the constitution and operation of the nuclear value chain. The FNRSA oversees the construction of nuclear power plants in Finland, first, by regulating the procedures and quality criteria to be implemented throughout the value chain of nuclear power plant construction, and, second, by inspecting plans, materials, and construction to ensure that everything complies with safety requirements.

The regulations that FNRSA produced are open-ended so that they can reflect developing best practices and do not overly constrict the possibilities of commercial operators to choose from a number of available options. Due to this open-endedness, the regulations do not always provide direct guidance but instead need to be interpreted in the contexts of the specific plans and operations of each supplier and contractor involved in the project.

The FNRSA has a public law relationship to the company that has been granted a license to build and operate a nuclear power plant（licensee）. In Olkiluoto 3, the licensee ordered a nuclear power plant on turnkey basis from the main contractor, a two-party consortium. Both consortium members organised their respective parts of the value chain, each comprising hundreds of suppliers and subcontractors from numerous countries.

Olkiluoto 3 has been an abject failure. One major cause of the failure, it seems, was in the design of the governance structure for mobilizing the FNRSA regulations to control contractor performance in the value chains. On the basis of the FNRSA report it seems that the licensee, in practice, outsourced the implementation of the FNRSA regulations to the main contractors who in turn did the same with their respective value chains.

Failure followed when various actors in the value chain misinterpreted the FNRSA requirements. The FNRSA maintained that it had a relationship only with the licensee and could not directly address issues raised by the other value chain members. It appears that the project had no centralized arrangements set up to ensure proper compliance with FNRSA regulations. Thus, the misinterpretations travelled from one value chain member to nodes further up in the value chain all the way to the FNRSA before they could be addressed and then sent back down through the contractual chain of command hierarchy. The non-functional communication arrangement contributed to the serious delays experienced in the project.

At first glance, decentralizing the responsibility to interpret the FNRSA regulations is a natural contract governance move. However, according to the FNRSA, ensuring compliance with FNRSA regulations was the duty of the licensee. The FNRSA had expected the licensee to establish a system of compliance beyond the level of individual contractor value chains. The licensee organized the project governance structure to make the main contractor responsible for compliance. The main contractor pushed responsibility further down and expected its suppliers and subcontractors to ensure compliance. The structure of delegating responsibility was replicated through the value chains.

Who, then, is to blame for delays caused by non-compliance with the FNRSA's requirements? Should the licensee have taken a more active role, or was the risk of non-compliance validly passed on to one or more of the other members of the value chain? There is no easy answer to the question, nor will I attempt to provide one. My focus turns procedural. Suppose, further, that some of the individual contracts in the value chain were breached in a way that could have been avoided had the value chain been organized as expected by the FNRSA. The ensuing dispute involves many if not all members of the value chain. As they all had a stake in the success of the contract boundary spanning governance mechanism requested by the FNRSA, they all also have a legitimate interest in participating in the dispute even though it may not be directly related to their own contracts. On an even more indirect level, such disputes also concern environmental, safety, and labour interests. Poor value chain governance may lead to oversight of necessary environmental and safety features, while the ensuing long delays cause labour management problems possibly leading to temporary or permanent layoffs.

Similar situations are not limited to the very specific scenario of a nuclear construction project in Finland. The question of organizing the governance of a value chain and the effects that different forms of value chain governance have on the individual contracts of the value chain is relevant in numerous other contexts such as automotive or aircraft manufacturing.In all these contexts, a centralized dispute resolution forum that could overcome the same contract boundaries as the contract boundary spanning governance mechanism would help mitigate the negative effects of governance failures.

2.2 The current framework for centralized dispute resolution

A single centralized forum for dispute resolution is arguably a better solution than multiple proceedings if multiple parties under multiple contracts are involved in a dispute revolving around the same issues. The need for a single venue is particular pressing in value chains. Value chains are functional wholes. The chain actors must maintain amicable relationships to enable the chain to function.

The avoidance of contradictory judgments, increased overall efficiency, and increased willingness in finding an amicable settlement are advantages typically attributed to a centralized forum in multiparty and multi-contract arbitration.Loss of efficiency for some parties and a possible lack of transparency and foreseeability in forum selection, on the other hand, are some often mentioned disadvantages.Beyond these, a further factor to be taken into account is limitation periods. In long-term and severely delayed projects such as Olkiluoto 3 that comprise numerous actors in complex value chains, parties are often required to initiate proceedings that remain pending while waiting for the outcome of other proceedings in order to not lose their rights.

If a value chain implements contract boundary spanning governance methods, the situation is even more multifaceted. Olkiluoto 3 is an illustrative example. The fate of individual contract disputes may be dependent on a contested overall value chain governance mechanism. Yet the governance mechanism may have no link to the individual contractal beit the governance mechanism that is the root cause of the dispute. The problem is striking. If no centralized dispute resolution forum that can overcome contractual boundary lines exists, the overall efficiency of the value chain will suffer, but also transparency and legitimacy within the value chain will be torn apart.

Despite the need, centralized dispute resolution forums are rarely found in contractually organized value chains. The reasons for their non-existence are often legal. In the following two subsections I will discuss the general framework of international commercial arbitration（Section 2.2.1）and mediation（Section 2.2.2）from the perspective of a centralized dispute resolution forum in multiparty and multi-contract proceedings.

2.2.1 Arbitration

Arbitration is almost without exception the dispute resolution method of choice in large-scale project contracts. To implement a centralized project dispute resolution forum using arbitration, two issues are crucial. First, all value chain actors must be bound by an arbitration agreement that subjects disputes to a single forum. Second, the procedural framework must be flexible enough to accommodate multiparty and multi-contract arbitration. The former question depends on contract law rules, while the latter is governed by applicable procedural rules such as a national arbitration law or the rules of an arbitration institute the parties agreed to use.

The simplest option to accommodate both issues is to draft an arbitration clause or agreement that specifically enables multiparty and multi-contract proceedings and have relevant parties sign it.Another option is to construct a conflict management system. Both options pose formidable challenges. All the relevant parties would have to be identified and induced to sign. Such agreement may be difficult to achieve in complex value chains. First, value chains are often dynamic and fluid, and consequently contract management is difficult. Second, different actors may have widely divergent objectives that may hamper the reaching of a consensus.

Without a single arbitration clause or a unitary conflict management system that extends to all relevant parties and contracts, finding a common dispute resolution forum to aid in value chain governance will be nearly impossible. A number of legal doctrines may, however, facilitate at least limited governance even if explicit value chain dispute resolution arrangements are missing.

If the different contracts of a value chain contain compatible dispute resolution agreements, a venue may be parsed together. In compatible dispute resolution agreements, technically separate agreements refer to the same institutional arbitration rules, which allow the interpretation that the parties had, in fact, intended that the various separate contracts constituted one multilateral transaction.Close connections between contracts and close links between reciprocal rights and obligations may be indicative of such. For example, according to Hanotiau, “the economic unity of the group [of contracts]is becoming one of the most important criteria in determining the scope of the arbitration agreement within the group, at least when it appears to be in line with the will of the parties”.

The compatibility solution is limited in its scope. If contracts in a value chain, for example, refer to different institutional arbitration rules and, consequently, contain incompatible dispute resolution agreements, no common intent of the parties to have a dispute resolved in a specific forum can be easily identified.No saving grace exists. An innovative solution to lacking intention was developed by Teubner. He proposed that if a governance structure forms above the level of individual contracts, then this governance structure should be treated apart from the individual contracts.Conceivably such a governance structure, perhaps similar to what the FNRSA requested to be implemented above and beyond individual contracts in the Olkiluoto 3 scenario, could provide a possibility for overriding incompatibilities between individual contracts.

The procedure followed in multiparty and multi-contract arbitrations depends on the institutional or ad hoc arbitration rules chosen by the parties and the applicable law. The problem is that applicable arbitration rules and laws may contain divergent regulations on, for example the role of parties in multiparty arbitrations, the possibility of and the prerequisites for multi-contract arbitration, joinder and consolidation.While some national arbitration laws do regulate multiparty and multi-contract issues, others remain silent and leave the issues up to the parties' choice of institutional or ad hoc rules. For example in Finland the local arbitration law does not cover multiparty or multi-contract issues, while the Arbitration Rules of the Finland Chamber of Commerce do regulate such issues in detail. I will compare these rules with other institutional approaches in Section 3.1.2 below.

2.2.2 Mediation

The regulation of mediation（or conciliation）follows a pattern similar to arbitration. The scope of a mediation clause is dependent on interpretation of the parties' agreement while mediation procedure is based on applicable procedural law or any institutional or ad hoc mediation rules chosen by the parties.

Institutional mediation rules do not explicitly address multiparty or multi-contract issues even if mediation thought to have value in such disputes.The key reason for this must be that mediators are by and large free to structure mediation proceedings as they see fit.For example, according to Article 7 of the ICC Mediation Rules, the mediator and the parties are free to structure the proceedings as they agree.

In general, mediation emphasizes the underlying business interests of the parties in a way that would not be possible in binding legal proceedings.Thus mediation proceedings as a non-binding, interest-based form of dispute resolution may be easier to establish in the multiple party and contract spanning disputes of a value chain even where no contractual obligation to do so exists. Should such proceedings lead to a mediated agreement, a specific enforcement advantage may be attainable over normal agreements depending on the national framework for enforcing mediated agreements. Finnish mediation law provides one example of this and it will be discussed in detail in Section 3.2.

3. Value Chains and Finnish Regulatory Approaches to Dispute Resolution

In this section I look at how the general framework presented above in Section 2.2 is reflected in current Finnish regulation on dispute resolution.

First, there is no explicit legislation on the scope of dispute resolution agreements in contractually organized value chains. A few cases where Finnish courts have dealt with parties' contractual dispute resolution arrangements in multi-contract settings provide the only guidance available. These cases are discussed in Section 3.1.

The Finnish Arbitration Act regulates the general procedural aspects of arbitration in Finland.It contains no explicit rules on multiparty or multi-contract disputes. The Arbitration Rules of the Finland Chamber of Commerce（FCC Rules）, on the other hand, do regulate multiparty and multi-contract proceedings.I will discuss the FCC Rules in Section 3.2.

Finally, out-of-court mediation in Finland is based on the Mediation Directive（Directive 2008/52/EC of the European Parliament and of the Council of 21 May 2008 on certain aspects of mediation in civil andcommercial matters）. The directive was implemented in Finland through the 2011 Mediation Act（Act on mediation in civil matters and confirmation of settlements in general courts 394/2011）.As of now the Finland Chamber of Commerce has not adopted rules on mediation. The Mediation Act contains almost no rules on the conduct of out-of-court mediation proceedings. Instead, the Act concentrates on the prerequisites that a mediated agreement must fulfil for to be recognized equal to a court judgment in enforcement. I will discuss these requirements in Section 3.3.

3.1 Finnish cases relating to the scope of dispute resolution agreements

Although privity of contract is the leading principle, non-signatories may also be bound by arbitration agreements under Finnish law. For example, the Finnish Supreme Court has found that a guarantor is entitled to refer an arbitration agreement in the construction contract to the performance of which was guaranteed.Other examples include assignees, third party beneficiaries, and maritime insurance.

However, cases on multi-contract situations are meagre. The few available cases deal with multi-contract situations between the same parties, such as when two parties have entered into a number of different contracts all relating to the same general transaction. A framework agreement and purchase orders made under the framework agreement are typical examples.

In the Supreme Court case KKO 1990: 106 two parties had entered into a dealership agreement. The same parties then entered into an agreement on the sale of equipment to be used under the dealership. The dealership agreement contained an arbitration clause, while the sales agreement contained a prorogation clause in favour of a local court. The Supreme Court found the two agreements independent from one another. Thus the dispute, which revolved around the sales agreement, was governed by the prorogation clause in the sales agreement.

In a more recent Supreme Court case, KKO 1997: 200, two parties had entered into a foreign currency credit agreement. Later on, the same parties entered into a credit restructuring agreement that covered all their previous agreements. The former agreement had no dispute resolution clause, while the latter had an arbitration clause. The Supreme Court found that the parties had intended to cover all disputes arising from their earlier credit agreements with the credit restructuring agreement, and, therefore, the arbitration clause extended to all disputes arising from under the earlier credit agreements.

Finally, in a case from 2011 the Helsinki Court of Appeal, the court found that where two or more agreements between the same parties form a single contractual entity（sopimuskokonaisuus）, the presumption is that the parties have not intended to initiate separate dispute resolution proceedings for the different agreements.An arbitration clause in one of the agreements was, thus, extended to another agreement that did not have an explicit dispute resolution clause.

Thus, only few conclusions can be made with regard to dispute resolution in value chains based these cases. Where agreements form a single contractual entity and do not contain incompatible dispute resolution agreements, the scope of an arbitration agreement may extend to all contracts in the entity. Other than that, little can be said with certainty. There are no cases involving multiple contracts with incompatible dispute resolution agreements where the different contracts would have been held to constitute a single contractual entity. Nor are there any cases suggesting the opposite. Neither are there cases involving multi-contract situations between multiple parties.

Some of the arguments used hint above by the Finnish Supreme Court in the cases that the Court could be likely to adopt a pragmatic approach to the scope of dispute resolution agreements. The dispute resolution clause most closely related to the dispute may be the preferred choice if dispute resolution agreements contradict each other.Again, it is unclear what this would mean for the scope of dispute resolution agreements in a contractual value chain with a contract boundary spanning governance mechanism. Could the mechanism be construed as a contract above the layer of the individual contracts of the value chain or, for example, as a special trust-based relationship, is unclear. Thus also whether issues related to such a governance mechanism might be settled in the forum most closely associated with the arrangement despite incompatible dispute resolution agreements otherwise is an open question.

In the meanwhile, the only certain way of organizing a centralized dispute resolution forum fora value chain is through an umbrella dispute resolution clause in all connected contracts. Alternatively, using compatible dispute resolution agreements in the separate contracts of the value chain might also work as long as the value chain constitutes a single contractual entity indicating the value chain members' intent to settle their disputes in the same proceedings.

3.2 Arbitration Rules of the Finland Chamber of Commerce

The FCC Arbitration Rules seem to have borrowed their approach to multiparty and multi-contract proceedings from the 2012 ICC Arbitration Rules（ICC Rules）.Consequently, I will compare the FCC Rules primarily to the ICC Rules while also commenting on a numberof alternative models.

Under the FCC Rules'multiparty arbitration regime, any party to a proceeding may raise a claim against any other party despite any nominal status as claimant or respondent.Further, the claims need not be based on the same contract or arbitration agreement, as long as all claims arise under the FCC Rules.The right is not unconditional. For arbitrations based on one arbitration agreement, the rules require that the board of directors of the Arbitration Institute be prima facie satisfied that the agreement allows for all the claims to be heard in the same proceedings.If multiple arbitration agreements exist, the rules require that the board be prima facie satisfied that the arbitration agreements are not incompatible with one another and that the parties may have agreed that their claims can be determined in a single arbitration.These requirements are in general similar to those in the ICC Rules.

Joinder of additional parties is possible without the agreement of all parties up until the moment when the case file is transmitted from the Arbitration Institute to the arbitral tribunal, while later requests for joinder require agreement from all parties.This is also in line with the ICC Rules.In any case, joinder is subject to the same requirements as multiparty arbitration. Before the board allows a joinder request to proceed it must be prima facie satisfied that claims against or from the party to be joined fall under an arbitration agreement governed by the FCC Rules. If multiple arbitration agreements are involved the board must be similarly convinced that no incompatible arbitration agreements are involved and that all the parties may have agreed to hear the disputes in the same proceeding.

Consolidation is possible either where, first, all parties agree to it, second, all the claims are made under the same arbitration agreement, or, third, where the claims are not made under the same arbitration agreement, when the disputes arise in connection with the same legal relationship and the arbitration agreements are compatible with one another.The third option differs from the comparable rules in the ICC Rules. ICC requires in addition that the arbitrations be between the same parties.With regard to consolidation the FCC Rules, thus, appear more flexible than the ICC Rules.

Albeit that arbitral tribunals have the final say on whether or not they will assume jurisdiction in particular cases, the FCC board may decide whether it will allow a case to proceed to an arbitral tribunal in the first place if joinder, consolidation, multi-contract proceedings have been requested or any claim questioning the existence of a binding arbitration agreement or any objection to determination of multiple claims in a single proceeding has been raised.Also this is in line with the ICC Rules save for two exceptions. First, the ICC Rules allow for joinders and multi-party arbitration proceeding requests to automatically proceed to tribunal scrutiny if such requests go unchallenged. The International Court of Arbitration（the functional equivalent of the board of the FCC Arbitration Institute under the ICC Rules）has to make a prima facie decision on acceptability of the requests only if a party objects. Second, the ICC Rules explicitly state thatany party may appeal all decisions by the ICC Court except decisions on consolidation.In the FCC Rules there is no provision on whether decisions of the board can be appealed or not.

In sum, the FCC Rules generally follow the framework presented in Section 2.2 above. Multiparty arbitrations are possible as long as the arbitration agreement allows for claims from multiple parties. Multi-contract arbitrations are possible as long as there are no incompatible arbitration agreements and as long as the parties have intended for the claims to be determined in the same proceeding. Whencompared to other institutional rules, multiparty and multi-contract disputes are clearly and extensively regulated. For example, the CIETAC Rules allow consolidation only when all parties agree to it, while multi-contract settings or joinder are not addressed.Similarly, the Stockholm Rules allow consolidation without agreement as long as the parties in both proceedings are the same while remaining otherwise silent on joinder and multi-contract proceedings.

One general point of critique can, however, be raised. The relevant provisions in the FCC rules seem to borrow much of their content_from the ICC Rules. No doubt the reasoning behind this has to do with the status of the ICC Rules as an internationally well-known standard. The ICC Rules also provide a flexible and up-to-date model for regulating multiparty and multi-contract arbitrations. For example, joinder under the ICC and FCC Rules does not require that all or some parties give their consent unlike under some other institutional rules.It is, nevertheless, questionable whether ICC rules are the optimal regime for dealing with joinders and multiparty and multi-contract arbitrations. For example, under the Swiss Rules requests for joinder are decided by the arbitral tribunal instead of the arbitral institute. Requests for joinder fall under identical rules independent of whether the requests were submitted prior to the constitution of the tribunal or later.Compared to the Swiss Rules, the ICC approach seems to have a number of drawbacks. It gives the arbitration institute significantly more power to direct arbitration proceedings by making crucial decisions on multiparty jurisdiction. As seen above, the FCC Rules take this approach even further.

Transferring some of the power to decide over multiparty and multi-contract issues from arbitral tribunals to arbitration institutes may be grounded in an effort to guarantee foreseeability in international commercial arbitration and the use of institutional rules. Foreseeability comes at a cost. The power transfer adds an additional layer of governance. This may affect the transparency and legitimacy of institutional arbitration by decreasing the level of control that parties have over the proceedings. Suppose that the board of the FCC Arbitration Institute refuses to forward a request for joinder to an arbitral tribunal because it is not convinced that the applicable contract law would allow the scope of an arbitration agreement to be extended to the party to be joined. The party requesting joinder is nonetheless certain that the contractual arrangement in question allows joinder. Who has jurisdiction over this pre-jurisdictional dispute? Could the party requesting joinder for example ask for a court injunction against the arbitration institute's decision？

From a value chain perspective, the FCC Rules are a major step forward compared to those arbitration rules that do not address questions arising in multiparty or multi-contract situations. The FCC Rules are similarly a step forward from institutional rules based on less flexible approaches requiring explicit agreement on procedural issues such as joinder or consolidation. However, the FCC Rules can also be criticized for the additional layer of governance they institute to multiparty and multi-contract arbitration by transferring some of the power to decide over the acceptability of claims from arbitral tribunals to an opaque organ of an arbitration institute.

3.3 The enforcement of mediated agreements

As noted in Section 2.2, mediation is a flexible alternative to arbitration. There are few binding rules on how mediation should be conducted. Mediators and parties are relatively free to structure their proceedings as they see fit. Nonetheless, in Finland a mediated agreement can be granted a distinct enforcement advantage that equates it with a court judgment. This requires a district court decision declaring the agreement enforceable, which in turn requires certain criteria to be met. I will discuss these criteria here as they de facto regulate the conduct of mediation proceedings in Finland.

First, there is no international framework for the enforcement of mediated agreements. While arbitration awards have a broad enforceability under the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards（New York Convention）, the scope of the Finnish Mediation Act is jurisdictionally limited to two scenarios. The mediation must take place either in Finland or, if an EU cross-border mediation is involved, in another EU member state excluding Denmark. A EU cross-border mediation is one where the parties are domiciled in different EU member states. If for example a Chinese and Finnish party wish to resolve their dispute through mediation and have an agreement that is directly enforceable in Finland, the mediation must take place in Finland.

Second, the mediation process must be“a structured proceeding”, structured proceedings are, according to the Mediation Act section 18, proceedings that are based on agreement, institutional mediation rules or“other similar arrangements”, such as a decision to mediate. Somewhat counterintuitively, the mediation proceeding itself does not need to be structured. The Mediation Act contains few rules on how the mediation procedure is to be structured, save for excluding evaluative mediation, i. e. mediation where the mediator explicitly evaluates the strengths and weaknesses of the parties' legal positions, out of its scope.According to the Mediation Act, section 18, the Act“does not apply to procedures where the mediator as an expert makes decisions or recommendations for settlement of the dispute regardless of whether the decisions or recommendations are binding”.

Third, the mediated agreement itself must fulfil a number of requirements. The agreement must be in writing and signed by all the parties and the mediator. Further, all parties must not only agree on the contents of agreement but also agree that it is directly enforceable. Only if such dual consent is received from all parties, can the district court confirm the enforceability of the mediated agreement.

Finally, the Act establishes a degree of content control. The mediated agreement may not be confirmed as enforceable if it is against the law, manifestly unreasonable, violates the rights of a third party, or cannot be enforced under the provisions of the Finnish Enforcement Code.

Meeting all these requirements provides a marked advantage. The agreement may then at any time be taken to the enforcement authorities and the authorities will directly initiate enforcement proceedings. The party seeking enforcement escapes the inconvenience of having to initiate court proceedings to procure an enforceable judgment. But because there is no international framework for enforcing mediated agreements, this may be of little value from the perspective of global value chains unless the mediated agreement can be enforced in Finland, or in case the Mediation Directive's criteria for a cross-border mediation are fulfilled, in other EU member states.

Thus, in case the value chain is truly global, the avenue opened by the Mediation Act might not be the best alternative for enforcing mediated agreements. Alternatively, a mediated agreement may also be enforced in the same way as a normal contract. This would mean raising a claim of breach of contract at the relevant local court and enduring the possible lengthy court proceedings. A better alternative might be that where an arbitration tribunal can be constituted, the tribunal may adopt the mediated agreement as its award. This would have the advantage that a mediated agreement dressed up as an arbitral award has wide enforceability globally under the New York Convention.

4. Conclusion: The Rule of Law and Private Dispute Resolution?

The FCC would like to see Finland as the“problem-solver of the world”by 2030.Whether the highly ambitious goal can be attained depends crucially on whether Finland has a world-class dispute resolution infrastructure. I have in this article looked at the framework for international commercial dispute resolution in general and in Finland in particular from the perspective of multiparty and multi-contract issues that may arise in global value chains.

No simple solutions exist for constituting a centralized forum for dispute resolution in global value chains. Contractual arrangements, institutional rules, and the skills of mediators in organizing and managing proceedings, all embedded in national and international law on contracts, arbitration, and mediation, work together to create a complex framework. As seen above, all these aspects also have their individual challenges. It is uncertain how contract law will treat dispute resolution agreements in global value chains that simultaneously constitute a whole while being built up from individual contracts. Institutional arbitration rules are being updated to better account for multiparty and multi-contract situations. Amidst the porous, uncertain and changing rules, arbitration institutes seize some of the jurisdictional power that has traditionally belonged to arbitral tribunals, creating added layers of governance. Mediation faces different kinds of challenges. The lack of a fixed procedural framework places emphasis on the training of mediators to recognize and structure multiparty and multi-contract procedures, while the enforceability of mediated agreements is put in question by the lack of an international enforcement regime.

The international commercial dispute resolution framework transfers a considerable amount of decision-making power from national legislators and courts to arbitration institutes, mediators, and the parties themselves. The relationship between the multiple parties' different intentions in making（or having to accept）particular contractual arrangements and choosing certain sets of institutional rules has a profound impact on the way their disputes will be settled. These choices affect the efficiency, transparency, and legitimacy of dispute resolution proceedings. In cases like the Olkiluoto 3 scenario that is not only limited to the parties directly involved in a value chain, but may also have repercussions on for example environmental, safety and labour issues. Due to their broad societal impact, particular attention should be paid on the many governance aspects of international commercial dispute resolution in global value chains as a whole, all the way from legislative, contractual, and arbitration institute perspectives to the training of mediators.